AFCG
Advanced Flower Capital Inc.
$3.09
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 88.3% below fair value
You pay
$3.09
Bear
$18.56
Fair
$26.52
Bull
$34.48
Bear
$18.56
+500.8%
ROTCE 4.0% → 0.30x TBV
Fair
$26.52
+758.3%
ROTCE -11.8% → 0.30x TBV
Bull
$34.48
+1015.7%
ROTCE -13.5% → 0.30x TBV
Adjust Assumptions
-11.8%
10.0%
Key Value Driver
ROTCE (-11.8%) vs. cost of equity (10.0%)
Implied Market Multiple
0.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$8.25
Divergence from AlphaVal
221%
Summary
With ROTCE of -11.8% vs. 10.0% cost of equity, fair P/TBV is 0.30x on $7.81 tangible book, implying $26.52 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Return on equity (-11.8%) is below the minimum investors require (10.0%). This means the bank is worth less than the net assets on its books.
Wall Street's average price target is $8.25 (from 11 analysts). Our estimate is 221% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly